By Tiyashi Datta

(Reuters) – Zynga, (NASDAQ:) Inc will report its results Monday. Investors will track the effect of Apple’s recent privacy changes on “FarmVille’ maker Apple’s ability target ads and to attract gamers.

Apple Inc. (NASDAQ) introduced its privacy update in April. Third-play apps cannot track iPhone users without consent. It led to warnings from many social media platforms, including Meta Platforms Inc. Snap Inc (NYSE:

Piers Harding Rolls, Ampere Analysis’s head of games research, stated that companies who rely heavily on in-game ads for the majority of their revenues are more vulnerable to Apple’s privacy breaches.

He said that user acquisition is a key area for all mobile game companies.

THE CONTEXT

The “Empires & Puzzles” owner, during its second-quarter earnings call, had warned that pressure on ad revenue and bookings would be more pronounced in the third quarter, given the adoption of Apple’s privacy changes.

Data from Newzoo analytics shows that approximately 85 percent of iOS users have updated to the latest version. Fyber, an app monetization specialist, said that the opt-in rate to track users was low.

Analysts said that there could be a convergence of mobile gaming companies due to the uncertainties surrounding iOS.

“This kind of M&A activity will continue throughout the rest of 2021 and into 2022 as advertisers explore new ways to monetize in-game ads on iOS”, analytics firm GlobalData’s gaming analyst Rupantar Guha said.

Markets with highest mobile game revenues https://graphics.reuters.com/ZYNGA-RESULTS/akvezmqdzpr/chart_eikon.jpg

For interactive graphic, click here: https://tmsnrt.rs/2ZVqoUV

FUNDAMENTALS

* Zynga has spent billions of dollars on acquiring mobile game developers Peak, Rollic and Echtra Games to beef up its game roster. Chartboost, a mobile game advertising network Chartboost was also purchased by Zynga to increase its own advertising.

* Analysts estimate ZNGA’s third-quarter net bookings to grow 6.05% to $666 million when it reports on Monday, the slowest in 13 quarters.

* Earnings per share is estimated at 7 cents.

WALL STREET SENTIMENT

* Average analyst rating on stock is “buy”, with 18 “strong buy” or “buy”, no “hold” and 1 “sell”.

* Median price target is $11 versus the current price of $6.90.

Net Bookings slowing down for Zynga as restrictions ease https://graphics.reuters.com/ZYNGA-RESULTS/xmpjorkzqvr/chart.png

For interactive graphic, click here: https://tmsnrt.rs/3CR1vYC

QARTER ENDING IBES ACTUAL RESULT

ESTIMATE

Jun. 30 2021 0.09 0.04 Missed

Mar. 31 2021 0.09 0.08 Missed

Dec. 31 2020 0.09 0.09 Met

Sep. 30 2020 0.09 0.10 Beat

​​Jun. 30 2020 0.08 0.10 Beat

Mar. 31 2020 0.06 0.06 Met

Dec. 31 2019 0.06 0.08 Beat

Sep. 30 2019 0.05 0.05 Met